Your revenue matters relating to savings and investments will witness a couple of crucial alterations in 2021. From writing cheques to swiping of credit cards to generating investments in mutual funds, there are a handful of crucial individual finance alterations to hold an eye on when moving into 2021. Here are a couple of of them.
1. Positive Pay mechanism for cheques
To additional augment consumer security in cheque payments and cut down situations of fraud occurring on account of tampering of cheque leaves, RBI has now decided to introduce a mechanism of Positive Pay for all cheques of worth Rs 50,000 and above. Under this mechanism, cheques will be processed for payment by the drawee bank primarily based on facts passed on by its consumer at the time of issuance of cheque. Positive Pay System is obtaining implemented from January 01, 2021.
How it functions: All 1 wants to do is share the information of issued cheque like Cheque Number, Cheque date, Payee name, Account quantity, Amount and so on along with an image of the front and reverse side of the cheque, prior to handing it more than to the beneficiary.
When the beneficiary submits the cheque for encashment, the cheque information are compared with the information supplied to the Bank by means of Positive Pay. If the information match, the cheque is honoured. In case of mismatch in cheque information, the cheque is referred to you.
2. Contactless payments
In order to expand the adoption of digital payments in a protected and safe manner, the RBI has proposed to improve the limit for contactless card transactions from Rs 2,000 to Rs 5,000 from January 1, 2021.
The improve in limits will, nonetheless, be at the discretion of the user. On NFC enabled cards, there is no requirement to enter PIN when generating transactions at merchant establishments.
3. E-mandate for recurring transactions
The transaction limit on e-mandates for recurring transactions by means of cards and UPI will be elevated from Rs 2,000 to Rs 5,000 from January 1, 2021. The relaxation will assistance customers in generating higher ticket recurring payments like utility bills, investments, two-wheeler EMIs, customer tough EMIs and so on. seamlessly. The improve in limits will, nonetheless, be at the discretion of the user.
A cardholder desirous of opting for e-mandate facility on card shall undertake a 1-time registration approach, with added issue authentication (AFA) validation by the issuer. An e-mandate on card for recurring transactions shall be registered only soon after effective AFA validation, in addition to the regular approach necessary by the issuer. This facility will now also be offered for UPI customers.
4. Digital payment disputes
The RBI has announced the introduction of Online Dispute Resolution (ODR) technique for resolving consumer disputes and grievances pertaining to digital payments, working with a technique-driven and rule-primarily based mechanism with zero or minimal manual intervention. The authorised entities have been asked to implement an ODR technique for disputes and grievances connected to failed transactions in their respective payment systems by January 1, 2021.
5. Standard term life insurance coverage program
Buying term insurance coverage program will grow to be considerably easier than prior to. IRDAI has directed all life insurers to mandatorily present Standard Individual Term Life Insurance Product to be known as ‘Saral Jeevan Bima’with impact from 1st January, 2021. The Standard term life insurance coverage program will have straightforward attributes and normal terms and situations. The minimum sum assured is kept at Rs 5 lakh when the maximum cover can be for Rs 25 lakh. Anyone in between 18 and 65 years of age can invest in the program.
6. Multi-cap mutual fund scheme
There has been a revamp in the Multi Cap Funds and they had to comply with new recommendations by January 2021. SEBI had decided to partially modify the scheme traits of Multi-Cap Fund. As per the earlier categorisation, in a Multi-Cap Fund, the Minimum investment in equity & equity connected instruments is to be 65% of total assets investing across big cap, mid-cap, smaller-cap stocks.
Now, the minimum allocation in big-mid-smaller cap organizations has been defined. The Minimum investment in equity & equity connected instruments – 75% of total assets in the following manner:
- Minimum investment in equity & equity connected instruments of big-cap organizations – 25% of total assets
- Minimum investment in equity & equity connected instruments of mid cap organizations – 25% of total assets
- Minimum investment in equity & equity connected instruments of smaller cap organizations – 25% of total assets
7. New Riskometer tool
Selection of mutual fund scheme primarily based on one’s danger profile also becomes less complicated from the new year. Till now, the Riskometer of a mutual fund scheme depicted 5 danger locations – Low, Moderately Low, Moderate, Moderately High and High Risk.
Going forward, there will be a new danger location for the MF schemes as SEBI has decided to introduce, ‘Very High Risk’ as the sixth danger profile for the MF schemes. SEBI has informed that this new mutual fund rule shall be in force with impact from January 1, 2021, to all the current schemes and all schemes to be launched on or thereafter.